Notes to Accounts of LAPL Automotive Ltd.

8) Contingent Liability, Provisions and Contingent Asset
General Provisions

A provision is recognized when an entity has a present obligation as a result of past event
and it is probable that an outflow of resources will be required to settle the obligation, in
respect of which a reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on management estimate required to settle the
obligation at the balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current management estimates. Contingent Liabilities are disclosed
when the entity has a possible obligation or a present obligation and it is probable that a
cash outflow will not be required to settle the obligation.

Warranty Provisions

Provisions for warranty-related costs are recognised when the product is sold or service
provided. Provision is based on technical estimates by the management based on past
trends. The estimate of such warranty-related costs is revised annually.

Contingent liabilities

A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that probably will not require an outflow of resources or where a reliable estimate
of the obligation cannot be made. X

Contingent assets are neither recorded nor disclosed in the financial statements ''

9) Subsidy and Incentives Received:

Grants and subsidies from the government are recognized when there is reasonable
assurance that (i) the Entity will comply with the conditions attached to them, and (ii) the
grant/subsidy will be received.

The State government incentive received during the year is accounted on accrual/right to
receive basis and considered as a revenue receipt.

10) Foreign Currency transactions:

Foreign currency transactions are recorded at the rate of exchange prevailing at the date of
the transaction. Monetary foreign currency assets and liabilities are translated at the year-
end exchange rates and resultant gains / losses are recognized in the statement of profit &
loss for the year.

B) Notes on Account

1) Sundry creditors, Sundry debtors and advance are subject to confirmation. Further in the
opinion of the management the current assets, loans and advances have the value for
realization in the ordinary course of business at least equal to the amount at which it''s
stated in the accounts.

2) The company is in the process of compiling the information about the status of their
suppliers or creditors those falls under small-scale industrial undertaking as defined The
Micro Small and Medium Enterprises Developments Act 2006 (MSMED Act). Therefore no
information is being provided in current year.

7) In case of payments made by cheques or bank drafts, we are unable to verify whether

e payments are made by crossed cheques / bank drafts in absence of necessary
evidence in possession of the Assessee. pessary

8) Accordingly previous year figures have also been reclassified/ regrouped/ rearranged to

confirm to current year grouping & classification. / rearranged to